administration. >> interesting. >> i find that absolutely fascinating. paging dana priest. i wonder -- where the deign ma priest stories are these days? way to early. it's "morning joe." stick around for chuck todd and "the daily rundown." london calling. rupert murdoch faces parliament as the uk media hacking scandal deepens. more resignations moshgs questions and now an early whistle-blower is dead. the news corps chief testimony, will it make things better or worse? headed across the pond. we're going to find out this hour. back here in the state. cue the blame game. the debt deal is coming and nobody likes it. will anyone come out of this looking good? >> and her first appearance since taking the reins of her

party. it's tuesday, july 19, 2011, i'm chuck todd. let's get to my first story, the debt talk. it's the beginning of the blame game. a deal to avoid a default will likely come at the last minute and virtually no one and the finger pointing is starting early. yesterday. berkshire hathaway warren buffett chided leaders for missing a big opportunity. >> i think that any plan that simply says, you know, think about this later essentially, and we're going to try and figure out how things went wrong to blame it on the other party is a terrible mistake. we cannot go to august 2nd and tell the rest of the world because we're having this fight in our sandbox back here that we're going to essentially default on obligations of the united states for the first time in our history. that's a level of -- of immaturity that i don't believe this congress is up to. >> warren buffett was at the

white house, and the white house talked to reporters this morning. david brooks calls out republican groups who he says decided not to seize the chance to usher in the largest cut in the size of government in american history. he also added, they do not see politics as the art of the possible. they do not believe in seizing opportunities to make steady, messy progress towards conservative goal. they believe if they can remain pure in their faith, some day their party will win a total and permanent victory over its foes. they believe they are the gods of the new dawn. consider this, rolling out a plan with $9 trillion in deficit reduction and grover norquist panned it because it closes some tax loopholes. coburn told nbc, this is a sick place. i mean, think about it. you don't want to make this deal because it's good for the country but it's bad for me? we need a bunch of spinal transplants in both parties.

so what is the public stand about this? a massive messaging war, if you will, between the two parties for the last three or four week. the new nbc/"wall street journal" poll and i can tell you one thing it's pretty decisive. that's tonight on the "nbc nightly news," all about the debt ceiling as well as an update on where the presidential race stands. speaking of purity any politics, the house votes today on its so-called cut, cap and balance legislation. it cuts the deficit, catches federal spending as a percent of the economy and requires passage of a balanced budget amendment with a two-thirds majority for tax increases before the debt limit is raised. almost certain to die in the senate. the president promised to veto the bill, of course, it will never get to them. but republican leaders believe it's necessary to placate base conservatives. and even mitch mcconnell appears to be messaging for his own base and frankly jim demint. >> my message to senate democrats this week is this -- i would suggest you think long and hard about whether you'll

vote for the cut, cap and balance legislation. it may be the only option we have if you want to see the debt limit raised at all. >> well, maybe being the operative word. the white house calls the bill, duck, dodge and dismantle.a lit yesterday. they got to get the votes out of the way, bottom line, and for many knowing these photo op votes were coming. question, how many democrats if any will join them in the vote of this? remember, this balanced budget amendment much different than the one previously. before a tax inxrees allowed in, what grover norquist, why is he for this balanced budget amendment and hasn't been fall or because he thinks it could lead to tax increases. finally, rick perry watch. day two. you can argue it's like day 32. he told the daily register he

was feeling called to a presidential run, said, ah, don't take me so literally. there's a lot of different ways to be called. my mother may call me for dinner. my friends may call me for something and there are people calling from across this country into either me directly or people they know and saying, man, we wish you would consider doing this. still, tonight four dozen republican donors meet to map on a perry campaign should he decide to run. by the way, the whole bunch of folks trying to recruit crhri ce to run in happening in new york. and today, the first step towards raising the debt limit even though the balance the budget amendment has zero chance of becoming law. chairman of the dnc and florida congresswoman debbie wasserman schultz. thank you for coming up on.

>> thank you for having me, as always. >> we understand that speaker boehner and eric cantor met. they met at the white house over the weekend. where does the actual deal stand? is all the negotiation going on, taking place in the senate and between house republicans? >> the actual deal stands at democrats led by president obama being willing to put all of our sacred cows on the table, still pushing for a big deal to make sure that we can solve our nation's fiscal crisis over the short term and the long term. and on the republican side, sadly, it seems that they are still only willing to insist on their dogmatic adherence to anything that makes sure that we protect millionaires and billionaires. the duck, dodge and dismantle plan that we're going to vote on in the house today is the ryan plan on steroids. it would end medicare as we know it. it would potentially slash social security benefits.

make sure that elected members of congress avoid accountability by forcing decisions instead of requiring us to stand in front of our constituents and own up to the votes we cast, which is what we're elected and paid to do. totally irresponsible. >> i want to ask you about something the president said on friday when it comes to medicare and this idea of mean testing for all of medicare. we know parts of it i think with the prescription drug benefit are means tested. is it right for the president to put that on the table, and could you support that as part of the so-called grand bargain? >> well what we're doing right now is trying to make sure that we can address our -- our long term and short term deficit problems. we're trying to make sure we can solve this problem in a big way, and the president has said repeatedly that he wants a big deal on the table. what we've got with the republicans, again, is that they are -- willing to end medicare as we know it, and want to slash

programs at the expense of the middle class and working families, and small business owners, and protect millionaires and billionaires, and, again, democrats are willing to put all of our sacred cows on the table, really be responsible and held accountable for that responsibility and republicans want to protect millionaires. >> so if there were a grand bargain and republicans said we will put raising taxes on the top 1% or 2% on the table as well, could you support potentially a means testing of medicare as the president came out for? >> what the president has said and democrats have said is that we need to protect benefits nap we don't need to be slashing benefits at the expense of middle class folks, of seniors, of children, and that's what i'm going to continue to back him up on. i want to make sure that we solve this problem in a bag way. >> big way. >> sounds like you don't want to say where you are on this. i understand -- >> danger of republicans meeting

us anywhere close to half way, there isn't a single republican i've heard that is willing to say they would consider any revenue generated by a deal and all they do is continue to dogmatically protect millionaires and billionaires. it's irresponsible. >> let me ask you. this stalemate we all are wat watching from our point of view sometime, you just said, i don't have to say what i'm for essentially. i don't have to answer that question, because there's no danger that somehow republicans are going to put taxes on the wealthy out there. at some point, when is -- when does somebody have to say uncle, fine. here's the sacred cow i'm truly for and will do it. i'm not going to like it and i know it's going to make my base mad but i'll do it. >> on the contrary. democrats -- president obama, has said we need to put everything on the table. he put social security on the table, medicare on the table. >> is it important to say this

is our proposal on social security. we'll raise the retirement age. are you saying -- that's been the argumentship saying we don't know exactly what he's for. >> chuck, we have already made significant progress in addressing the solvency of medicare and the affordable care act. added eight years of solvency to medicare and have other ways to do that in social security and medicare. but we need negotiating partners on the other end willing to put their sacred cows on the table. that's what a negotiation is. that's what we elected to do. that's what the american people expect of us. so that they can hold us accountable. the duck, dodge and dismantle plan is simply an and kabdicati responsibility. it would tie congress' hands and that's not what we were sent here to do. >> political notes. in wisconsin, the first of these recalled state senate elections hit the ballots. this one is not going to be an contentious as some ones in

august. what role is the dnc playing in these special elections? >> well, we have volunteers who are very active in all of the states, in wisconsin there's a lot of very motivated democrats and motivated voters all across that state who are deeply concerned about governor walker's focus on harming workers, taking away their rights, not making sure that benefits and salaries are not only adequate but not dealing with the deficit and trying to blame working people. >> are you guys spending extra money? are you sending -- the dnc sending extra money to wisconsin for these elections? >> the wisconsin state democratic party is coordinating the efforts of the activists on the ground who are working on those campaigns, and we're proud of them. they've been working really hard, and we think it's important that wisconsin voters know that their governor would cut the legs out from under workers and blame them instead of dealing with their fiscal

problems. >> you emphasize the state party. so the dnc is playing a hands-off role for now? >> we're working with all of our state parties on their priorities and wisconsin is no exception. >> dnc chairwoman, debbie wasserman schultz, down there in fort lauderdale, thanks for coming on. >> thanks, chuck. and conservatives groups fighting against senator mcconnell's debt ceiling plan. and for a plan, there's no chance of becoming law. so who has more sway over republican members ever congress these days? there party leader or the outside groups. and the plot thickens in the uk phone hacking scandal. hours after a whittle blower in the -- whistle-blower ends up dead -- rupert murdoch in the hot seat. we'll bring you his testimony live when it happens. first, the president's schedule today. kind of a quiet day. a press briefing. always on these quiet days you end up hearing from the

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women, the mcconnell/reid contingency plan may be congress' only way to avoid default. some say it's a sellout. using dereliction of duty and demanding republican stroet kill the bill. grover norquist just released this ad. >> president obama and the democrats want to raise our debt limit even higher, spending even more. but what will republicans do? cave in or show some spine? tell republicans in congress, no debt limit hike without real spending cuts and a balanced budget amendment.

>> all right. with me now is the president of the club for grover norquist, republican, chris, former congressman. thanks for joining me now. there was, we're seeing some blame game and i had excerpts of the david brooks article. he goes after the permanent campaigner, the interest groups. names grover norquist by name, frankly, the implication is all of the purists in the interests, in the activists community on this. how do you respond to him? >> he knows something we don't know. he says there was some plan that was close to a deal. the only plan we heard earlier is the president's do nothing, spend everything and go bankrupt. we're not aware of a plan. >> why not call his bluff? i went through this. you just heard -- it seems everybody is afraid to just see how much the other side is really willing to do, and instead they pull back and say, well, publicly he's only said x? >> i think republicans should

call the president's bluff. i think republicans hold all the cards. >> say it. say, okay, want to do this, we'll consider tax hikes only if you are in favor of -- >> no. the problem is the size of debt and deficit and it has nothing to do really with taxes but everything to do with spending. republicans really should stand firm and say, listen, we've got to cut, cap and balance plan gets us on the way to fiscal security. we're on a bullet train to fiscal disaster. the president can't sit in the white house and say, gee whiz, if we don't raise the get ceiling and there is market disruption, they blame the guys that own one-third of the government. i'm just president of the united states. what can i do about this? i don't think the president can sit back and risk market disruption if there's no debt ceiling increase. we're not against a debt ceiling increase. we think you need fundamental reforms that change the way washington spends people's money, because this is like

gravity. you can't escape it. cut, cap and balance is inevitable. like the frahm oil filter commercial. pay now or may me paying later is always painful. >> in this respect, it has a two-thirds super majority on the tax increase front. so if the -- the other balanced budget amendment, the simple majority, we know secretly is 60 in the senate, thanks to their rules that's the way that work. why not come out for that and actually make an attempt to win over democrats on the balanced budget amendment jrchts it's not winning over democrats but the american people. who are the winners and losers here? the only winner and loser is the american people. what's the end game? it isn't august 2nd. it's the future of our country. if you have a balanced budget amendment that says, listen, we're going to cap spending at 18% of gdp, the historic revenue number, so let's just cap it at how much we take in we're going to spend. if you say we're not raising

taxes of the debt without a super majority vote, which in times of economic or national defense crisis, we might have to do those things, it's just common sense. so, you know, congress is an opinion follower. it doesn't lead public opinion. it follows public opinion. in jeane anuary we started this. now it's being voted on. >> follows public opinion? it's been more open to tax cuts on the wealth around nobody seems to -- that doesn't sway them. >> 82% of americans think we vo should have a balanced budget amendment like the one just dised. the more person people understand about the options to get our fiscal house in odor the more they think we ought to do the responsible thing. not kick the can down the road. and the ceo of a public traded company once. when companies face up to their problems, stick to plans, start to trim work forces, stock goes up.

investors have confidence, they're doing the right thing to survive. when they increase debt, don't have a plan to get out from under the burt burden is when -- >> you voted to raise the debt ceiling twice. once a vote and once simply a voice voted, where there was no recording of it, which may be what they have to do this time to avoid this. why risk all this financial uncertainty by playing politics with the debt ceiling? >> if we don't do it now, when are we going to do it? this problem isn't going away. if we don't start to address this problem responsibilitily, the only thing i know for sure, it won't go away and get harder every day. >> making the mcconnell plan a negative vote for anybody that supports it? >> anybody that supports it is a porting raising the debt creel ceiling with no fundamental reforms. >> you will vote against that, consider that a negative in -- >> yes, sir. >> thanks for coming in. taking aim.

all about iowa for the political campaign. ames or bust this week. trying to shore up support ahead of what's turning into a crucial straw poll. we're live in iowa at the command center next. plus, the scandal that began with one newspaper now spreading throughout rupert murdoch's billion dollar corporate empire all the way to the british parliament. could it reach the pond? across the pond here in the u.s.? murdoch's live testimony is coming up. you're watching "the daily rundown" only on msnbc. i got mine in iraq, 2003. u.s.a.a. auto insurance is often handed down from generation to generation, because it offers a superior level of protection and because u.s.a.a.'s commitment to serve the military, veterans, and their families is without equal. begin your legacy. get an auto insurance quote. u.s.a.a. we know what it means to serve.

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well, political campaigns are supposed to look a lot like a big business these days. multimillion dollar start-ups. thousands of investors, in a clear-cut time frame to get off the ground. for republican tim pawlenty, the action is in iowa where the former minnesota governor is taiking on a strong showing in the caucuses if he can get there. live at the pawlenty command center in urbandale, a look at political machine.

seems like it is ames or bust for this team. do they act that way? >> absolutely. they're pouring everything into this race. the time frame you mentioned has gotten shortened for the pawlenty campaign, because the poll numbers nationally have been difficult. last night tim pawlenty had an event in these headquarters here. you see behind me his political team is having their morning meeting now to strategize and try to get people out for that straw poll. tim pawlenty is in boone, iowa this morning and they realize, they've only got a 1.4 million dollars left in cash as of the last report. he didn't raise nearly as much as mitt romney did. they've got to throw everything into this to have a strong showing. try to prevent michele bachmann, others, rick perry, from overtaking him, overshadowing him. he still has a plan to emerge as the alternative to mitt romney. keeping fund-raising going through the end of the year, winning the caucuses in january. not an easy road for tim

pawlenty you know, chuck, but in a race as wide open and unpredictable as this, can't count him out just yet despite all the obituaries being written now. >> you have seen the sarah huckabee impact? >> absolutely. sarah huckabee is in the room behind knee now. she is running that iowa straw poll and, of course, her father, mike huckabee, did well in that four years ago. and this is one of the whittling events. it he had a terrible showing that might endanger the future of his candidacy. they're counting on coming in in the top three with m michele bachmann and ron paul. we'll see if they can pull it off. >> checking with all the campaign, thanks very much, john harwood. checking in with all of the campaigns. cnbc's chief washington correspondent, all around iowa. fun to follow and track. all right. here we go. coming up, it's the age-old question since the watergate

days. what did rupert murdoch know and when did he know it? that's going to be what the british parliament wants to find out. the media mogul, his son and former editor of "news of the world" all set to testify this morning. this ain't a congressional testimony. a little different. we're expecting that hearing to begin any moment and we'll bring it to you live when it happens. this is the "daily rundown" on msnbc. s the way, uh-huh, uh-huh ♪ [ male announcer ] introducing mio. a revolutionary water enhancer. add a little...add a lot. for a drink that's just the way you like it. make it yours. make it mio. wow! it's even bigger than i thought. welcome to progressive. do you guys insure airstreams?

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all right. bottom of the hour now. let's go right to london. rupert murdoch is set to testimony any moment now about the phone hacking scandal that has rocked his media empire. at least ten people arrested including one of murdoch's most trusted lieutenants. the firestorm has also swept through scotland yard where two top police officials have had to resign. jim maceda is live in london, jim, set the stage. >> reporter: hi, chuck. well, you're right.

all eyes are now on a very small room, very small room, maybe for 40 or 50, behind me in the building there, parliament building. there are overflow rooms. lots of tv sets. this is must-see tv for the brits today, and i would suspect elsewhere as one british politician said yesterday, these are the three musketeers of the murdoch media empire, and the phone hacking scandal, of course, with it. who will be appearing any minute now. to give you a taste of how electric the atmosphere here has been, just a little while -- about an hour ago, rupert murdoch arrived in a vehicle outside of parliament mobbed by dozens, perhaps hundreds of cameramen and photographers to the point where he couldn't get out of his car. he drove up a eventually came in through a back entrance. now, the murdochs and rebekah brooks will be grilled by ten members of something that doesn't sound very threatening called the select committee on culture media and sport.

they will have only an hour to grill rupert and his son james murdoch followed by another hour for rebekah brooks. she, of course, was the chief executive of murdoch's british newspapers until she resigned last week. chuck, what can we expect today? well, the members of parliament will try to get the murdochs and brooks to commit themselves. top try to say something on the record that could be used against them later. especially if they make the mistake of saying something wrong or misleading or false. the murdochs said rebekah brooks, on the other hand, likely to be as contrite at possible. the buzzword now is apologize, apologize, apologize. we'll probably hear a lot of that as well today. >> help our american viewers here. what is going to be different of this parliamentary process that they will see compared to what might be -- what a congressional hearing on this side of the pond would look like? >> reporter: well, i think in

many ways it will be similar. the obvious differences is that they don't take an oath at the beginning. they are asked to say on their honor, that whatever they say is the truth. but there's no oath taken, and there are few people here who have been able to make the point or, if, for instance, someone does turn out to say something misleading, whether that is a crime or not. >> right. >> reporter: but this is the main difference and, of course, it's the time as well. there's only an hour with the two murdochs, only an hour with rebekah brooks. so that tends to mean a lot of gatlin gun questions, very short answers and this happens a lot in the states, lawyers sitting next to each one of them, leaning in, interrupting, giving advice along the way. >> right. >> >> reporter: it's fireworks but not likely, chuck, to see a lot of that actually in the meeting. back to you. >> okay. jim maceda, following this in london.

here's live pictures. murdoch is -- and his son are now sitting down in front of this inquiry commission. i want to bring in to nbc news investigative reporter, mike isikoff and msnbc reporter and political analyst richard wolff. mike, is there an equivalent of a fifth that either one, either the two murdochs or ra bebecca brooks can take? >> the standard ongoing investigation. what struck me about only an hour for this testimony? which striiks me as very short time. >> we're going to start listening and dip in when there's a break. >> -- would come out during the course of questions. if you feel that's not the case then you can make a statement.

to the end. >> in that case, submit the statement in writing if it pleases you. >> that would be perfectly acceptable. >> thank you, mr. chairman. >> could we please -- >> excuse me. >> all right. after that brief interruption we will begin. good afternoon, everybody. this is a special meeting of the committee. a follow-up to the inquiry which the committee held in 2009 into

press standards, privacy and liable during which we took evidence on the extent of phone hacking which had taken place in "the news of the world." in our report last year we stated that we thought it was inconceivable that only one reporter had been involved. in the last few weeks, it has emerged that not only evidence has come out to which i think has vindicated to this conclusion, but also abuses have been revealed to which have angered the entire country. it's also clear that parliament has been misled. we are very conscious of the committee that there is san ongoing police investigation and possible criminal proceedings to follow and this committee would not wish to jeopardize that, however, we are encouraged by the statements that have been made by all the witnesses this afternoon that they wish to cooperate with the committee and help us to establish the truth. so as our first witnesses this afternoon, can i welcome the

chairman and chief executive of news corps, rupert murdoch and the deputy and chairman executive of news international, james murdoch. can i also thank you for making yourself available to the committee this afternoon. >> we are more than prepared to talk to you. >> thank you. perhaps i might start with mr. james murdoch. you made a statement on the 7th of july in which you stated that the paper had made statements to parliament without being the part of the facts a and that was wrong. you said parliament was misled in has we had been told. can you tell us to what extent we were misled and when you became aware of that? >> mr. chairman thank you very much. first i would like to say as well just how sorry i am and how sorry we are to particularly the victims of illegal voicemail interceptions and to their family. it's a matter of grave regret of

mine, my father's and everyone at news corporation and these are standards, these actions do not live up to the standards that our company aspires to everywhere around the world, and it is our determination to both put things right, make sure these things don't happen again, and to be the company that i know we've always aspired to be. as for my comments, mr. chairman and my statement, which i believe was around the closure of "the news of the world" newspaper. >> before we get to that i would just like to say one sentence. this is the most humble day of my life. >> thank you. >> thank you. >> the statement around the closure of "the news of the world" newspaper where i stated that -- we, the company had not been in full possession of the facts when certain statements were made to this committee was refers to the emergence of new facts largely that came about as the end of 2010 as the due

process of a number of civil trials reached their point where document disclosure and evidence disclosure made it apparent to the company and to myself at that time that indeed there were -- there was reason to believe that potentially more people had been involved in "news of the world" illegal voicemail interceptions from before. that was new evidence or new information at the time that post-dated the 2009 hearings and that is what i was referring to. subsequent to our discovery of that information in one of the civil trials at the end of 2010, which i believe was the sienna miller case, around illegal voicemail interceptions, the company immediately went to look at additional records around the individual involved. we alerted the -- the company alerted the police, who restarted on that basis the

investigation that is now under way, and since then the company has admitted liability to victims of illegal voicemail interceptions harks apologized unreservedly, which i repeat today to those victims and the company also set up a compensation scheme independently manageed by a former high court judge to be able to deal with legitimate claims coming from victims of those terrible incidents of voicemail interceptions, and those are the actions that were taken as soon as the new evidence emerged. so when i made the statement about not being in a full possession of the facts, it was of those facts at that point were still in the future, and it was in the due process of that civil trial of the civil litigation process that that evidence really emerged for us, and we acted, and the company acted, as swift lly and as

transparently as possible. >> when this committee took evidence in 2009, we heard from the managing editor of "news of the world," the legal manager of news international, but "news of the world" editor colin michael. former editor and the former chairman of news international. all of them told us there had been a their o'investigation, no evidence was found that anybody else was involved. that clearly was not correct. were any of them lying to this committee? >> the -- mr. chairman, the company relied on three things throughout -- for a period of time. up until the new evidence emerged. the company relied on a police investigation in 2007, and this is before, i'll recount this to try to take us back to that area. this was before i was involved.

i became back involved in news corporation in these international matters in the end of 2007. in the 2007 period there was a police investigation successful prosecutions were brought against two individuals, and the editor of "the news of the world" resigned. and the company relied on both the police having closed the investigation and repeated assertions that there was no new evidence for them to reopen their investigation. the company relied on the pcc, which it had a report and it said there was nothing more to this at the time, and the company relied on the legal opinion of outside counsel that was brought in related to those matters who, with respect to their review had issued a clear opinion that there was no additional illegality other than the two individuals involved before. and the company relied on those facts and for the company in

2008 and 2009, it was not -- it was not clear there was a reason to believe that those matters were anything other than several matters in the past. >> is it your testimony at this committee the deal that gave us evidence in 2009, none of them knew at that time what had been going on? >> i don't have direct knowledge of what they knew and at what time, but i can tell you that the critical new facts as i saw them and as the company saw them really emerged in the production of documentary information or evidence in the civil trials at the end of 2010, and the duration from 2008 until, or 2007, i should say, until the end of 2010 and the length of time it took for that to come clear and for that real evidence to be there is a matter of deep frustration, mine, i have to tell you, i know and i

sympathize with the frustration of this committee, and it's a matter of real regret that the facts could not emerge and could not be gotten to to my understanding faster. >> you've made clear that, indicated that the information we were given was incorrect. have you established who, as well as clive goodman, was involved in phone hacking in "news of the world"? >> i'm sorry, mr. chairman. >> who as well as clive goodman was involved in phone hacking in "the news of the world"? >> as i think you made it clear earlier, mr. chairman that there are a number -- there have been a number of arrests of former "news of the world" employees. these are matters for current criminal investigations and i think it's understandably difficult for me to comment in particular around some of those individuals. >> have you carried out your own investigation since the discovery of this information to

find out the extent of involvement of phone hacking in "news of the world"? >> we have -- we have established -- we have established a group in the company cooperating very closely with the police on their investigation. their investigation is broad with respect to journalistic practices and in particular journalistic practices at "the news of the world," and the policy and the direction that the company has given them is to cooperate fully and transparently with the police to provide information and evidence that the company believes and they believe is relevant to those investigations. sometimes pro actively, sometimes in response to those requests, and, again, i think the very fact that the provision of the new information to the police in the first place, when there was no police investigation ongoing that then led to in part the reopening or this new investigation being established. i hope can be testament to some

proactive action and transparency with with respect to getting to the right place in finding out the facts that happened, and understanding all of the allegations that are coming in, and moving forward to aid the police in a successful completion of the important and serious work that they're doing. >> okay. and the departure from your company in the recent few days of tom, michael and les hinton is that because any of them had knowledge of phone hacking? >> there is -- i have no knowledge and there is no evidence that i'm aware of that ms. brooks, that mr. hinton or any of those executives had knowledge of that and their

asoer asserti assertion, ms. brooks and her knowledge of those things to me has been clear. nonetheless, those resignations have been accepted, but it's important, you know, on the basis that there is no evidence today that i have seen or that i had any knowledge of that there was any impropriety by then. >> i'm going to turn to tom watson. >> good afternoon, sir. you've repeatedly stated that news corps has a zero tolerance to longdoing by employee wrong employees? is that so? >> yes. >> is it true you made your speech, let me be clear we will vigorously pursue the truth and will not tolerate wrongdoing. >> yes. >> so if you were not lying then, somebody lied to you. who was it? >> i don't know. that is what the police are investigating and we are helping

them with. >> but you acknowledge that you were misled? >> clearly. >> can i take you back to 2003. are you aware that in march of that year rebekah brooks gave evidence to this committee admitting paying police? >> i am now aware of that. i was not aware at the time. i'm also aware that she -- amended that considerably very quickly afterwards. >> but i think she amended it seven or eight years afterwards. >> sorry. >> did you or anyone else in your organization investigate this at the time? >> no. >> can you explain why? >> i didn't know of it. i'm sorry. i'm -- i'm going to say something. and this is not as an excuse. maybe it's an explanation of my laxity, "news of the world" did

less than 1% of our company. i employ 53,000 people around the world. who are proud and great and ethical and ethical and distinguished people. professionals. and perhaps -- and i'm spread watching and appointing people whom i trust to run their division. >> mr. murdoch, i do accept that you have many distinguished people who work for your company. you're ultimately spom for the corporate governance of news corp so what i'm trying to establish is who knew about wrongdoing and what was involved at the time. if i can take you forward to 2006, when clive goodman was arrested and subsequently convicted of intercepting voice mails, were you made aware of that? >> i think so. i was certainly made aware when

they were convicted. >> and what did news international do subsequent to the arrest to get to the facts? >> we worked with the police on further investigation and eventually we appointed -- very quickly appointed a very leading firm of lawyers in this city to investigate it further. >> perhaps i could help -- >> i'll come to you in a minute. just let me finish my line of questioning and i'll come to you. what did you personally do to investigate that after mr. goodman went to prison? you were obviously concerned about it. >> i spoke to mr. hinton, who told me about it. >> okay. can i ask in 2008, another two years, why did you not sdis news of the world chief reporter following the mosley case.

>> i never heard of him. >> despite a judge making clear that he set out to blame two of the women involved? >> i didn't hear that. >> a judge made it clear that he set out to blackmail two of the women involved in the case. >> that is the first i've heard of that. >> so none of your u.k. staff drew your attention to the serious wrongdoing, even though the case received widespread media attention? >> i think my son can perhaps answer that in more detail. he was a lot closer to it. >> i'll come to your son in a minute. so despite the fact that blackmail can result in a 14-year prison sentence, nobody in your u.k. company brought this fact to your attention? >> the blackmail charge, no. >> do you think that might be because they knew you would think nothing of it? >> no. i can't answer, i don't know. >> do you agree with mr. edy

when he said the lack of action discloses a remarkable state of affairs at news international? >> no. >> mr. murdoch, a judge found a chief reporter guilty of blackmail. it was widely reported. he says it was a remarkable -- >> why didn't he put him in jail? >> because it was a civil case. were you aware that news international commissioned an investigation into news international e-mails by lewis? >> was i -- >> aware that news international commissioned an investigation into news international e-mails by the solicitor's firm? >> yes. i didn't appoint them but i was told of it happening. >> you claimed in the "wall street journal" that they had made a major mistake. can i ask what mistake you were referring to?

>> i think maybe that's a question, again, for james, but there was certainly -- when we examined it -- reexamined that, we found things which we immediately went to counsel with to get advice on how to present it to the police. >> in their written response to this committee's questions, are you aware that news international stated that both john chapman and daniel cloak reviewed these e-mails before forwarding them to the firm? >> no. >> so nobody in the company told you that two of your executives had reviewed the e-mails -- >> i was under the understanding that everything had been sent to them. >> okay. you are aware that lord mcdonald

q.c. has since reviewed the e-mails on behalf of news international, are you not? >> yes. >> you're aware that he stated he found evidence -- >> and he's appointed the whole board of news corporation. >> and you're aware that he stated to the board that he found evidence of indirect breaches of national security and evidence of serious crime in the file? >> he did indeed. >> mr. watson, please, i can address these in some detail if you will allow me. >> i will come to you, mr. murdoch, but it's your father who's responsible for corporate governor ans governor ans and so i'd like to know what he knew. who was aware of the findings at news international? >> it went to the senior officials of news corp. certainly the top legal officer.

>> so tom crone or les hinton? >> no. they were not the top legal officers. >> who are the top legal officers? >> you can answer that. >> mr. john chapman was the top legal officer of news international and mr. crone was head of legal affairs at news group newspapers. >> were you informed about the findings by your son or by rebekah brooks? >> i forget, but i expect it was my son. i was in daily contact with them both. >> okay. when were you informed about the payments made to gordon taylor and max clifford? >> no. >> you were not informed? >> no. >> at no point you knew that

taylor and clifford made payments? >> i never heard. >> you never informed the chief executives that you authorized payment of half a million pounds -- i'd like you to tell me whether you had informed your father that you had authorized payment to gordon taylor as a result of him being a victim of a crime? >> the settlement with mr. taylor, and i'm happy to address the matter of mr. taylor in some detail if you would like. >> first just let me know -- >> my father became aware after the settlement was made in 2009, i believe, after the confidential settlement had become public as the newspaper reported on the out of court settlement afterwards. please understand that the settlement of an -- an out of court settlement of a civil claim with that nature and of that quantum is something that normally in a company our size the responsible executives in the territory, in the country

would be authorized to make and that's the way the company has functioned. and it's below the approval thresholds, if you will, that would have to go to my father as chairman and chief executive of the global company. >> there are other questions that i could ask but there are other colleagues who have questions so i'll move back to your father, if i can. at what point did you find out criminal nalt was indemic at "news of the world." >> indemic is a very wide-ranging word. i also had to be extremely careful not to prejudice the course of justice which is taking place now. that that has become disclosed i became aware as it became

apparent. and then i was absolutely shocked, appalled and ashamed when i heard about the case only two weeks ago, eight days before i saw it. >> did you read the report into the matter where we referred to the collective amnesia of your executives who gave evidence to our committee? >> i haven't heard that. >> nobody brought it to your attention? >> i haven't heard that particular charge. >> the parliamentary inquiry found your senior executives in the u.k. collective of collective amnesia and nobody brought it to your attention? i don't see why you think that's not very serious. >> no. you're really not saying amne a amnesia, you're really saying lying. >> well, we found your executives guilty of collective